Check out the Primary Source!: https://www.catribunal.org.uk/cases/16737724-professor-barry-rodger
A Quick Background:
A group of UK app developers sued Google, arguing that it had too much control over how Android apps are sold and distributed. They claimed Google effectively forced developers to use the Play Store and then charged commissions that were unfairly high, often up to 30%. Google denies wrongdoing. Google has agreed to pay £260 million to settle the claim before trial. Importantly, this is a settlement, not a judgment that Google broke competition law. Google admits no liability and says it has strong defences. This is not unusual. A Defending party often attempts to settle without admitting fault. This makes the action disappear without any formal record of wrongdoing, whether it happened or not. Sometimes it may be cheaper to settle than to Defend, even where a Defendant is adamant they have acted correctly.
A litigation funder is essentially an investor in a lawsuit. They provide the money needed to run a case, covering things like lawyers’ fees, expert reports and other litigation costs. In return, they receive a share of any recovery if the claim succeeds. If the case fails, they can lose the money they invested.
In the Google Play Store case, the funder Bench Walk Advisors put up around £27.7m to help finance the claim on behalf of app developers. Without that funding, it would have been very difficult for thousands of individual developers, many with relatively modest losses, to take on a company of Google’s size and resources.
The Google Play Store settlement has given litigation funders a smaller slice of the pie, not sent them home hungry.
Next week the Competition Appeal Tribunal will consider whether a proposed £260m settlement of claims against Google delivers a fair outcome for UK Android app developers. Of that sum, £160m would go to the class, while £100m would be allocated to the funders, lawyers and insurers who financed and ran the litigation.
Google has agreed the deal without admitting liability in proceedings alleging that restrictions surrounding the Play Store limited how Android app developers could sell and distribute apps. The litigation had been heading towards trial alongside related claims before settlement discussions brought matters to a close.
The debate now moves away from Google’s conduct and towards a recurring question in collective proceedings: when a case settles, how much of the recovery should end up in the hands of those who brought and financed it?
The answer is rarely straightforward. Collective competition claims are expensive, slow-moving and uncertain. They require years of legal work, expert evidence and substantial capital with no guarantee of recovery. Without external finance, many never leave the starting block.
Funding providers then need to balance justice and return on investment. The purpose of funding is to facilitate compensation to people or businesses who would be unlikely to be able to fund their own cases and obtain justice individually, but it would be unreasonable to expect anyone to risk just shy of £28 million without getting something in return!
That balancing exercise is at the centre of the tribunal’s responsibilities. Judges are not just asked whether a compromise has been reached. They must decide whether the compromise works for the class as a whole and whether those around the case have taken an appropriate share of the proceeds.
In this case, the funder has agreed to accept less than their contractual entitlements, reducing the amount they would otherwise have received and increasing the compensation Claimants receive.
Claimants need access to capital. Funders need a return that justifies the risk. Courts need confidence that compensation remains the primary objective rather than an afterthought.
The tribunal’s decision will therefore be about more than one dispute involving Google’s Play Store. It will provide another indication of where the boundaries lie between rewarding risk and protecting class members in the UK’s rapidly developing collective actions regime.
Author: Thomas Greatbanks
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